Executive Summary

In the 19th century, Horatio Alger wrote stories about young entrepreneurs who worked their way from rags to riches, coining the concept of "The American Dream," where anyone with a good idea and a strong work ethic can be successful.

Today, there’s a renaissance of opportunity in the business world, “The Unicorn Dream.” Growth is accelerating and any startup, no matter the size, has a chance at reaching a $1B valuation. With a good idea and the right resources, new businesses can go from a few developers in a garage to billion-dollar valuations in just a few short years. Perplexity, for example, was founded in 2022, has under 200 employees, and is already valued at nearly $10 billion dollars following a massive $500M round from IVP.

“Jeff Bussgang talks about the ‘10x founder,’ which demonstrates where we can aspire to and how much can be done by an individual founder today,” shares Mark Roberge, Co-founder at Stage 2 Capital and host of “The Science of Scaling” podcast.

With a pattern of larger, more strategic rounds in recent years, and a rising interest in strategic partnerships, investors are focusing on quality over quantity, and making big bets for the future. AI and machine learning startups, as well as tech and software companies, are dominating the high-growth space, largely funded by VCs. And new growth hubs are emerging in countries like Singapore, the United Kingdom, India, and France.

Investors are looking for lean, focused startups that quickly achieve product-market fit and show high growth rates in a short timeframe. “We really like vertical software plays that are very capital efficient. People are deploying as much product as they used to do in a quarter in two weeks. And we’re about to see the same benefits on the go-to-market (GTM) side. In reality, at some point in the future, we’re going to be able to build and distribute products for one-tenth of the cost. That changes the game,” says Roberge.